Current through March 14, 2024
(a)
Loss Ratio Standards
(1) A Medicare Supplement policy form or
certificate form shall not be delivered or issued for delivery unless the
policy form or certificate form can be expected, as estimated for the entire
period for which rates are computed to provide coverage, to return to
policyholders and certificate holders in the form of aggregate benefits (not
including anticipated refunds or credits) provided under the policy form or
certificate form:
(A) At least seventy-five
percent (75%) of the aggregate amount of premiums earned in the case of group
policies; or
(B) At least
sixty-five percent (65%) of the aggregate amount of premiums earned in the case
of individual policies; and
(C) The
provisions of subparagraphs (A) and (B) of this subsection shall be calculated
on the basis of incurred claims experience or incurred health care expenses
where coverage is provided by a health care center on a service rather than
reimbursement basis and earned premiums for such period and in accordance with
accepted actuarial principles and practices. Incurred health care expenses
where coverage is provided by a health care center shall not include:
(i) Home office and overhead costs;
(ii) Advertising costs;
(iii)Commissions and other acquisition
costs;
(iv) Taxes;
(v) Capital costs;
(vi) Administrative costs; and
(vii) Claims processing costs.
(2) All filings of
rates and rating schedules shall demonstrate that expected claims in relation
to premiums comply with the requirements of this section when combined with
actual experience to date. Filings of rate revisions shall also demonstrate
that the anticipated loss ratio over the entire future period for which the
revised rates are computed to provide coverage can be expected to meet the
appropriate loss ratio standards.
(3) For purposes of applying subsection
(a)(1) of this section, group policies or certificates issued as a result of
solicitations of individuals through the mail or by mass media advertising
(including both print and broadcast advertising) shall be deemed to be group
policies.
(4) For policies issued
prior to the effective date of this section, expected claims in relation to
premiums shall meet;
(A) The anticipated loss
ratio originally filed with the commissioner as modified to reflect the actual
claims experience since the inception of the policy or certificate;
(B) The appropriate loss ratio requirement
from subsection (a)(1)(A) or (B) of this section, as applicable, as modified to
reflect the actual claims experience during the period beginning on the
effective date of this section and ending on the date that the rates and rate
schedules are filed with the commissioner; and
(C)The appropriate loss ratio requirement
from subsection (a)(1)(A) or (B) of this section, as applicable, over the
entire future period for which the rates are computed to provide
coverage.
(b)
Refund or Credit Calculation
(1)
An issuer shall collect and file with the commissioner by May 31 of each year
the data contained in the applicable reporting form contained in Appendix A for
each type in a standard Medicare supplement benefit plan.
(2) If on the basis of the experience as
reported the benchmark ratio since inception (ratio 1) exceeds the adjusted
experience ratio since inception (ratio 3), then a refund or credit calculation
is required. The refund calculation shall be done on a statewide basis for each
type in a standard Medicare supplement benefit plan. For purposes of the refund
or credit calculation, experience on policies issued within the reporting year
shall be excluded.
(3) For purposes
of this section, for policies issued prior to July 30, 1992, the issuer shall
make the refund or credit calculation separately for all individual policies
combined and all group policies combined for experience after the effective
date of this paragraph. The first report shall be due by May 31,
2020.
(4) A refund or
credit shall be made only when the benchmark loss ratio exceeds the adjusted
experience loss ratio and the amount to be refunded or credited exceeds a de
minimis level. Such refund shall include interest from the end of the calendar
year to the date of the refund or credit at a rate specified by the secretary,
but in no event shall it be less than the average rate of interest for 13-week
Treasury notes. A refund or credit against premiums due shall be made by
September 30 following the experience year upon which the refund or credit is
based.
(c)
Annual
Filing of Premium Rates
An issuer of Medicare supplement policies and certificates
issued before or after July 30, 1992 in this state shall file annually its
rates, rating schedule and supporting documentation including ratios of
incurred losses to earned premiums by policy duration for approval by the
commissioner in accordance with the filing requirements and procedures
prescribed by the commissioner. The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice using reasonable
assumptions that the appropriate loss ratio standards can be expected to be met
over the entire period for which rates are computed. Such demonstration shall
exclude active life reserves. An expected third-year loss ratio which is
greater than or equal to the applicable percentage shall be demonstrated for
policies or certificates in force less than three (3) years. As soon as
practicable, but prior to the effective date of enhancements in Medicare
benefits, every issuer of Medicare supplement policies or certificates in this
state shall file with the commissioner, in accordance with the applicable
filing procedures of this state:
(1)
(A) Appropriate premium adjustments necessary
to produce loss ratios as anticipated for the current premium for the
applicable policies or certificates. Such supporting documents as necessary to
justify the adjustment shall accompany the filing.
(B) An issuer shall make such premium
adjustments as are necessary to produce an expected loss ratio under such
policy or certificate as will conform with minimum loss ratio standards for
Medicare supplement policies and which are expected to result in a loss ratio
at least as great as that originally anticipated in the rates used to produce
current premiums by the issuer for such Medicare supplement policies or
certificates. No premium adjustment which would modify the loss ratio
experience under the policy other than the adjustments described herein shall
be made with respect to a policy at any time other than upon its renewal date
or anniversary date.
(C) If an
issuer fails to make premium adjustments acceptable to the commissioner, the
commissioner may order premium adjustments, refunds or premium credits deemed
necessary to achieve the loss ratio required by this section.
(2) Any appropriate riders,
endorsements or policy forms needed to accomplish the Medicare supplement
policy or certificate modifications necessary to eliminate benefit duplications
with Medicare. Such riders, endorsements or policy forms shall provide a clear
description of the Medicare supplement benefits provided by the policy or
certificate.
(d)
Public Hearings
The commissioner shall conduct a public hearing in accordance
with section 38a-474 of the General Statutes to review the request by an issuer
for an increase in a rate for a policy form or certificate form issued before
or after July 30, 1992.